Over
the past week two high-level officials in Chinese Communist Party think
tanks have granted interviews to the western media in order to "unofficially"
warn the Bush-43 Administration not to take any steps to curtail the
importation of Chinese products into the United States or to attempt
to force China to increase the value of the yuan. The officials hinted
that China might be forced to liquidate its vast holdings of US Treasury
notes—totaling some $1.33 trillion. That could trigger a dollar crash
that would spark a major economic recession. In addition, a spike in
bond yields could trigger additional problems for the US housing industry,
sinking any housing market recovery for the balance of this year and
perhaps next year as well.

In
addition to the foreign reserves China is holding, Beijing also has
over $900 billion in US Treasury debt bonds. China believes it is firmly
in the driver's seat and can steer the US economy in any direction it
wants. Cabinet level Xia Bin—the chief of finance for the Development
Research Center—was the first to give lip service to what appears
to be the official position of Beijing—China will use its extensive
portfolio of US financial holdings as bargain chips in upcoming talks
with US officials. "Of course," he said, "China doesn't want
any undesirable phenomenon in the global financial order." Since
removing the dollar from the gold standard, the US government has financed
its deficits by selling debt bonds. When foreign nations stockpile those
bonds, it provides them with an economic weapon they can use against
America. From the birth of America, there has never been an army strong
enough to bring America to its knees. With most of the nations of the
world—including our oil allies in the Mideast—dumping the dollar for
the Euro, China and Japan are now the primary buyers of American debt
bonds. Our insistence to continue deficit spending means we have placed
our own necks in an economic noose, and we are standing on a flimsy
scaffold built in Beijing—and you know the quality workmanship that
goes into Chinese products. You know, you've had some of them for a
week or two before you had to throw them out with the trash.

He
Fan, an official at the Chinese Academy of Social Sciences, who
is highly regarded as the key forecaster of Beijing policy, amplified
what his colleague meant by saying that Beijing had the power to initiate
a dollar collapse if it chose to do so. "China has accumulated a
large sum of US dollars," he said. "Such a big sum, of which
a considerable portion are in US treasury bonds, contributes a great
deal to maintain the position of the dollar as a reserve currency. Russia,
Switzerland and several other countries have reduced their dollar holdings."
What He Fan should have said was, because of the US position in Iraq,
every major country in the world has dumped the dollar in favor of the
Euro, and none of America's closest allies and traditional western trading
partners are buying US debt bonds (which allows the Fed to create money
to meet the demands of the US government), "China is unlikely to
follow suit," He Fan told China Daily, "as long as the yuan's
exchange rate is stable against the dollar. The Chinese central bank
will be forced to sell dollars once the yuan appreciated dramatically,
which might lead to a mass depreciation of the dollar."

Several
political strategists in Europe believe the Chinese threat was a cautionary
rebuke of Sen. Hillary Clinton who, in playing to the crowds in the
pre-pre-campaign season Democratic debates, called for restrictive legislation
to prevent—she said—America from being "...held hostage to economic
decisions being made in Beijing, Shanghai or Tokyo..." adding that
foreign control over 44% of the US national debt made America vulnerable.
Clinton is one of several Senators—backed by the Senate Finance Committee—who
drafted legislation in 2004 that would impose tariffs on Chinese goods
in retaliation for a decade of currency manipulation by the Chinese.
The yuan has been pegged to the US dollar since 1994. China undervalued
the yuan to make its goods and services intentionally cheaper on the
international market. When Chinese manufacturers export a product, they
effectively receive a 15% to 40% subsidy on their exports, giving them
an insurmountable advantage over US manufacturers.

China's
latest economic muscle-flexing was as much about the fear that the bad
press they are getting in the American media might send US and European
retailers scurrying to find new vendors to manufacture American branded
goods as it is about exchange rates. A recall a million and a half Chinese-made
Fisher-Price™ toys and a recall of over 9 million Mattel™ toys are now
making US consumers consider the consequences to their children when
they buy goods made in China. While everyone wants to save a buck when
they shop—particularly when the US economy tightens, taxes rise, and
net incomes plummet—there isn't a "bargain" anywhere in the world worth
the lives of our children or, for that matter, not even our household
pets. The China scare began in April when it was learned
that the wheat gluten or rice protein used in several US and Canadian
pet food brands contained a synthetic polymer called melamine—made from
urea and formaldehyde. Over 15,000—with some media journalists claiming
as many as a hundred thousand—pets died from tainted pet food that used
tainted wheat gluten from China.

However,
at the end of July, US Treasury Secretary Henry Paulson—who had just
returned from Beijing—waited until his feet were safely on American
soil before ordering China to raise the value of the yuan or face the
economic consequences.(The yuan has been tied by the US dollar since
1994 to protect China's balance of trade since the United States is
its largest—and most lucrative—customer). In return, China suggested
it would be the United States facing the consequences if it chose to
get in an economic scuffle with China. The stalemate began. China was
careful not to use government officials to threaten the United States.
The cockwalking and peacock strutting was done entirely by quasi-official
bureaucrats who have made it very clear that Washington does not have
hegemony over Chinese policy—or the methods used by Chinese "free enterprise"
businessmen who are not under the jurisdiction of the US FDA.

Although
Paulson claims he's not worried if China exercises its "nuclear option,"
because the large Chinese holdings of US Treasuries consists of not
much more than one-day's trading volume in Treasuries. Paulson should
be worried, however, because the United States has no foreign currencies
with which to redeem its debt.

Confident
that it holds all the aces, China pursues business-as-usual, using its
American trade balances to buy both traditional and space age weapons(that
actually work) from the former Soviet Union. China is confident that
regardless what it does to the American consumer or the US Treasury,
it will not lose the US consumer market because, they believe, the Americans
are as dependent on their political enemies in China for cheap consumer
goods as they are dependent on their enemies in the Middle East for
overpriced oil.

At
the end of June, a New Jersey tire importer, Foreign Tire Sales, purchased
a half million tires from Hangzhou Zhongce to be sold to tire
distributors across the United States under the brands of Compas,
Telluride, Westlake and YKS. To save money in the manufacturing,
Hangzhou chose not to put gummed strips between the layers of rubber
in the tire. Without gum strips, the tires will separate at high speed,
causing life-threatening accidents at when the tires virtually explode.

According
to Nancy Nord, chairman of the Consumer Products Safety Commission
[CPSC] approximately 20 thousand American children were treated at hospital
emergency rooms for lead poisoning from 2000 to 2005 after swallowing
lead-based jewelry and trinkets made in China or in other third world
countries. (Lead poisoning can cause autism and other learning disabilities
in children.) In April alone, the FDA seized over 107 different human
food product imports from China. In addition, over one thousand tainted
Chinese dietary supplements, toxic Chinese cosmetic products and counterfeit
Chinese prescription meds were seized.

Every
month tons of tainted food or consumer products coming into the country
from China are seized. In addition, tons of counterfeit American and
European branded goods are confiscated by Customs officials. The only
reason more Chinese products are not barred is that only about 2% of
the food products and consumer goods coming into this country from China
are even checked. Most food containers are offloaded from Chinese merchant
ships and the containers placed on rail cars and sent into the heartland
of America where unwary consumers are waiting to become the next newspaper
headline or emergency room experience.

The
global backlash over defective Chinese products has triggered a spate
of recalls of Chinese goods across the world. The recalls trigger alarm
among American consumers when they happen—particularly when those recalls
involve names like Fisher Price™ or Mattel™. But, for
ourselves, it appears most American consumers are willing to risk their
lives to save a few cents to a couple of bucks on some flashy babble,
electronic gadget, exotic treat or some health supplement that's guaranteed
to improve the quality of your life—if it doesn't kill you first.

Anti-Chinese
import advocacy groups are now pressuring the Bush-43 Administration,
the FDA, the CPSC, and members of Congress to slap punitive tariffs
on all goods made in China. Pressure is mounting on Immigration and
Customs Enforcement to check every container coming from China,
and to inspect all goods before clearing them. In Europe, the online
supermarket chain, Asda.com, pulled toddler's drinking bottles from
its cybershelves because the caps were inferior and could come off when
the baby was drinking from the bottle.

Around
the world, the furor over Chinese goods is heating up to the point that
many retailers are placing signs that say "Not Made In China" on domestic
products, or goods made elsewhere that they sell to their own citizen
consumers. Product recalls on Chinese goods are increasing worldwide.
When recalls happen, who gets the blame? The American importers, American
branded product manufacturers, or the retailers who are being accused
of deliberately cutting corners and paying for slave labor to increase
their profits. In truth, the fault lies with a rogue nation that is
using its newfound economic clout to destroy the economic strength of
America. Within one more decade the United States (or what is left of
it) will be completely dependent on other nations for all of the goods
and services it consumes.

If
World War II happened tomorrow the United States government would not
be able to convert its manufacturing industry from peacetime to wartime
production simply because the United States no longer has a peacetime
industry to convert. If sudden war—triggered by a sneak attack on an
American military installation or on a major American city like New
York and/or Washington, DC—happened, the United States would lose the
war before it could reactivate manufacturing plants idled by the job
transfer from this country to the third world—and, in particular, to
the country that will most likely be part if the tripartite responsible
for what will begin as a missile attack on the strategic centers of
this country.

China's
economic "nuclear option" will be placed on the trade table when pressure
mounts on the Bush Administration—and its successor—to require China
to abide by all US product quality control regulations—and provide US
companies doing business in China with some control over the production
lines of their Chinese suppliers—before any goods made in China can
be imported into the United States. Corrupt and inept Chinese regulators
like Zheng Xiaoyu, the head of the Chinese State Food and Drug Administration,
who was executed in July for accepting bribes from a pharmaceutical
company that put diethylene glycol in cough syrup resulting in the deaths
of 100 people in Central America and ten in China. (Interestingly, none
of the management of Qigihar No. 2 Pharmaceutical Company that
manufactured the concoction fund themselves on death row—nor, for that
matter, in prison. The trial, conviction and speedy execution of Zheng
Xiaoyu was a media event to prove to the United States that not only
was Beijing appalled that such a grievous accident could happen, but
that the government would severely punish those who allow manufacturing
mishaps to occur.

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Yet,
as I said, China is not worried. Why? Because when push comes to shove,
the imports we get from China are largely products created by offshore
divisions of US corporations that, in 1993, contributed handsomely to
the war chests of then President and co-president Bill and Hillary Clinton—and
the Democratic majority in the House and Senate. Clinton and the Democratic
majority enacted NAFTA and created the swinging door that allowed not
only jobs but entire industries to leave the United States. And, in
return, NAFTA allowed cheap, slave labor foreign-made American-branded
products into the country—tariff-free, thus killing off even more American
jobs at home. China knows that good, old-fashioned capitalist greed
on the part of American entrepreneurs who are getting rich on inferior
products from China will leverage the US government to tolerate the
status quo even if, every now and then, a few people die from lead poisoning
or tainted food or inferior consumer products. Boy...won't it be nice
when Hillary gets in the White House and can finish the destruction
of the United States of America?

Jon Christian Ryter is the pseudonym of a
former newspaper reporter with the Parkersburg, WV Sentinel. He authored
a syndicated newspaper column, Answers From The Bible, from the mid-1970s
until 1985. Answers From The Bible was read weekly in many suburban
markets in the United States.

Today, Jon is an advertising
executive with the Washington Times. His website, www.jonchristianryter.com
has helped him establish a network of mid-to senior-level Washington
insiders who now provide him with a steady stream of material for use
both in his books and in the investigative reports that are found on
his website.

...the
imports we get from China are largely products created by offshore divisions
of US corporations that, in 1993, contributed handsomely to the war chests
of then President and co-president Bill and Hillary Clinton—and the Democratic
majority in the House and Senate.